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TMI Blog1968 (10) TMI 89X X X X Extracts X X X X X X X X Extracts X X X X ..... M.C. Chagla, Senior Advocate (A.N. Sinha and B.P. Jha, Advocates, with him), for the petitioners in W.P. No. 185 of 1968. Niren De, Solicitor-General of India (O.P. Malhotra and R.N. Sachthey, Advocates, with him), for the respondents in W.P. No. 133 of 1968. C.D. Garg, Senior Advocate (S.K. Mehta and K.L Mehta, Advocates of K.L. Mehta and Co., with him), for the petitioners in W.P. No. 165 of 1968. -------------------------------------------------- The judgment of the court was delivered by HIDAYATULLAH, C.J.-These are 17 petitions challenging the validity of the Punjab General Sales Tax (Amendment and Validation) Act, 1967 (7 of 1967) by the Punjab Legislature and the Punjab Sales Tax (Haryana Amendment and Validation) Act, 1967. Thirteen of these petitions challenge the Punjab Amendment Act and four challenge the Haryana Amendment Act. The petitioners are firms or companies dealing in cotton or oil-seeds. Their business is to purchase ginned and unginned cotton for manufacturing yarn and selling the said cotton also to registered and unregistered dealers both inside and outside the State. The petitioners of the second category purchase oi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rchase) shall not exceed the prescribed limit and shall not be levied at more than one stage and shall be refunded to persons from whom it is collected if the goods are sold in the course of inter-State trade or commerce. The original Punjab General Sales Tax Act, 1948, was challenged before this court in Bhawani Cotton Mills Ltd. case [1967] 3 S.C.R. 577; 20 S.T.C. 290. The Act in defining the taxable turnover in section 5(2) allowed certain deductions and one such deduction in clause (vi) was: "........turnover during that period on the purchase of goods which are sold not later than six months after the close of the year, to a registered dealer, or in the course of inter-State trade or commerce, or in the course of export out of the territory of India: Provided that in the case of such a sale to a registered dealer, a declaration, in the prescribed form and duly filled and signed by the registered dealer to whom the goods are sold, is furnished by the dealer claiming deduction." The original section, as it stood on 1st April, 1960, read as follows: "5. Rate of tax.-(1) Subject to the provisions of this Act, there shall be levied on the taxable turnover every year of a dealer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The provisions for taxing purchases of cotton were challenged on the ground that there was a possibility of the tax being levied at more than one stage, the provisions of the second proviso notwithstanding. The argument was summarized by our brother Vaidialingam thus: "In this case, according to the appellant, it has to send quarterly returns, even during the accounting year and, as per section 10(4) of the Act, it has to pay also tax in accordance with the returns submitted by it for every quarter. In the returns that are being sent, the dealer will have to include all purchases of cotton effected by him during the quarter for which the return is sent. There is no indication, either in the Act or in the rules or the forms prescribed, as to whether the persons, from whom the appellant purchased cotton, have paid tax or not. Section 15 of the Central Act is not restricted only to registered dealers. There will also be nothing to guide the appellant to know as to whether the goods purchased by it have been sold to it by its vendor within the period mentioned in clause (vi) of section 5(2)(a) of the Act. Under those circumstances, there is always a possibility, or even a certainty, o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hs after the close of the year (B being a registered dealer), A becomes liable to purchase tax. But, if B sells the identical declared goods, again, after the period mentioned in sub-clause (vi), he will also be liable to pay purchase tax. That means, in respect of the same item of declared goods, more than one person is made liable to pay tax and the tax is also levied at more than one stage. That is not permissible under section 15(a) of the Central Act. If goods are resold to a non-registered dealer, within the period, sub-clause (vi) will not help the original purchaser. We may also point out, at this stage, that sub-clause (vi) of section 5(2)(a) negatives the assumption that the normal rule, under the Act, in respect of declared goods, is to levy the tax on the first purchaser." This court then referred to section 12 where there is a provision for refund which taken with rules 48-58 allowed for refund to be claimed, and found the provisions insufficient to get over the difficulty. This court observed: "Even in the matter of obtaining refunds, there can be no controversy, that the appellant will have to place before the officer concerned particulars of transactions connected ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing Act No. 7 of 1967. Section 5 was amended retrospectively from different dates. In sub-section (1), in the second proviso, the words "as defined in clause (c) of section 2 of the Central Sales Tax Act, 1956, and such tax shall not be levied on the purchase or sale of such goods at more than one stage" are now omitted. After the second proviso another proviso is introduced. In sub-section (1A), the words "in respect of such goods other than declared goods" are substituted retrospectively from 16th December, 1965, for the words "in respect of such goods". After sub-section (2) a new sub-section (3) is introduced from October 1, 1958. We may now set out the fifth section as it emerges from the amendment before we deal with the objections: "Section 5. Rate of tax.-(1) Subject to the provisions of this Act, there shall be levied on the taxable turnover of a dealer a tax at such rates not exceeding six naye paise in a rupee as the State Government may by notification direct. (2) In this Act the expression 'taxable turnover' means that part of a dealer's gross turnover during any period which remains after deducting therefrom- (a) his turnover during that period on............... ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be made under this section against any dealer without giving such dealer a reasonable opportunity of being heard. (4) Notwithstanding-anything contained in any judgment, decree or order of any court or other authority to the contrary but subject to the provisions of the foregoing sub-sections any assessment, reassessment, levy or collection of any tax in respect of declared goods made or purporting to have been made, and any action or thing taken or done or purporting to have been taken or done in relation to such assessment, reassessment, levy or collection, under the provisions of this Act before the commencement of the Punjab General Sales Tax (Amendment and Validation) Act, 1967, shall be as valid and effective as if such assessment, reassessment, levy or collection or action or thing had been made, taken or done under this Act as amended by the Punjab General Sales Tax (Amendment and Validation) Act, 1967." The argument is that the position has not altered at all even after the amendments and the liability to taxation at different stages remains still and the Act continues to be in conflict with the Central Act on the same reasons on which Bhawani Cotton Mills case [1967] 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ability to pay the tax till he is the dealer liable to pay the tax. In our opinion, therefore, the present provisions of the Act are quite clear and are quite sufficient to make the amended Act accord with the Central Act. The arguments noted in the earlier case of this court do not therefore arise. It will thus be seen that the present Act does not suffer from any of the defects from which the unamended Act had suffered. It is, however, contended that the Act has been made retrospective but no machinery is provided to discover if the declared goods were assessed to tax more than once. As we have already pointed out, the matter is within the ken of the dealer himself and it is for him to decide whether he would not claim the benefit of section 11AA and ask for a refund or in future transactions delete the sales from his taxable turnover when he is not the last dealer liable to pay the tax. Therefore the retrospectivity of the Act does not make any difference. It is not contended before us that it was not within the competence of the Punjab Legislature to pass such an Act retrospectively. The defect pointed out is the self-same defect which was noticed in Bhawani Mills case [1967] ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the new States. This is what the Legislature has done and there is nothing that can be said against such amendment. In regard to Haryana cases also the same arguments are urged. It is contended that the amended Act there also offends section 15 for the reasons which we have given. Neither the amendment of section 5 in this area nor the introduction of section 11AA for refund offends against section 15 of the Central Act or the equality clause of the Constitution. It is said that pending cases will always be reconsidered whether or not an application in that behalf is made but in the case of disposed of cases it depends upon the party to intimate in writing that he has no objection to the assessment or reassessment already made. If any objection can be taken it will be by those whose cases are pending and not by those whose cases have been closed. The option to submit to the assessment is open to every one alike and there is no discrimination if a party wants that his case need not be reconsidered. He has only to state that in writing and that would be the end of the matter. If he wants his case to be re- considered then he can go before the Tribunal and get his case reconsidered ..... X X X X Extracts X X X X X X X X Extracts X X X X
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